2012
DOI: 10.1002/smj.2014
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Skill relatedness and firm diversification

Abstract: The concept of "relatedness" between industries plays an increasingly central role in economics and strategic management. However, relatedness has remained rather elusive in empirical terms. In this article, we investigate relatedness between industries in terms of the extent to which the same human capital can be employed in different industries. In particular, we investigate the skill-relatedness among different industries by investigating labor flows between industries.The data used are Swedish employer lin… Show more

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Cited by 440 publications
(447 citation statements)
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References 62 publications
(108 reference statements)
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“…In this respect, on a sample of US, Italian, French, UK, German, and Japanese firms patenting to the European Patent Office from 1982 to 1993, Breschi et al (2003) show that knowledge relatedness, measured on the basis of the co-classification codes contained in patent documents, is a major determinant of firm diversification, measured as a firm's probability to be simultaneously active in a further activity other than the core one. In a similar way, Neffke and Henning (2013) identify skill relatedness by using information on cross-industry labour flows and show that firms are more likely to diversify into industries that are more 'skill' related to their core activities than into industries without such ties or into industries that are linked by value chain linkages or by classification-based relatedness. These firm-level studies, thus, suggest that, although inter-firm technologically related knowledge spillovers do play a role in the evolution of firms' production structure, firms' internal productspecific abilities are undoubtedly a key driver of their choice of new productions.…”
Section: Geography Technological Relatedness and The Relative Contrmentioning
confidence: 99%
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“…In this respect, on a sample of US, Italian, French, UK, German, and Japanese firms patenting to the European Patent Office from 1982 to 1993, Breschi et al (2003) show that knowledge relatedness, measured on the basis of the co-classification codes contained in patent documents, is a major determinant of firm diversification, measured as a firm's probability to be simultaneously active in a further activity other than the core one. In a similar way, Neffke and Henning (2013) identify skill relatedness by using information on cross-industry labour flows and show that firms are more likely to diversify into industries that are more 'skill' related to their core activities than into industries without such ties or into industries that are linked by value chain linkages or by classification-based relatedness. These firm-level studies, thus, suggest that, although inter-firm technologically related knowledge spillovers do play a role in the evolution of firms' production structure, firms' internal productspecific abilities are undoubtedly a key driver of their choice of new productions.…”
Section: Geography Technological Relatedness and The Relative Contrmentioning
confidence: 99%
“…In columns 4-8, instead, we relax the definition of diversification possibilities and expand the number of possible product choices by considering all of the 1297 possible HCPA products present in our classification as new potential products. In this respect, we also include those goods belonging to those two-digit codes where the firm was not active in t À 1 in firms' addition possibilities set (Neffke and Henning, 2013). Thereby, we consider a more radical definition of innovation.…”
Section: Robustness Checksmentioning
confidence: 99%
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“…There do exist multiple additional ways of knowledge integration and interactive learning. Future research should examine the relationship between technology complementarity in R&D and patterns of for example inter-sectoral labor mobility (Neffke and Henning, 2013) or product embodied knowledge spillovers (Boschma and Iammarino, 2009). Forth, this paper has presented only a measure of technology complementarity.…”
Section: Resultsmentioning
confidence: 99%